Prime Minister Julia Gillard, who left Melbourne for Gallipoli on Sunday, is expected to hold a press conference during a stopover in Singapore on Monday morning.
Photo: Rebecca Hallas

The Gillard government’s ability to deliver one of the most critical budgets in years has suffered a serious blow after Peter Slipper stood aside in another political scandal that reduces Labor’s numbers in federal Parliament and increases the risk of an early election.

The decision by the Speaker to stand down while fraud and sexual harassment allegations against him are investigated will probably halve the government’s already slim ­majority to one vote and weaken its negotiating position in the hung ­Parliament.

Unless the allegations against Mr Slipper can be dealt with by ­investigating authorities before the budget is delivered on May 8 – which ­government officials conceded was unlikely – tough measures the government is promising to get the budget back into surplus face a rocky parliamentary passage.

The crisis around the Speaker, which erupted over the weekend and forced him to respond to massive political pressure to stand aside, has raised fresh questions about Prime Minister Julia Gillard’s judgment over the deal which made Mr Slipper, a former Liberal MP, Speaker.

Opposition Leader Tony Abbott last night said the Slipper crisis was the result of “a squalid and tawdry attempt to shore up her numbers, a squalid and tawdry deal which has now ended in tears” that left “huge question marks over the judgment and integrity of the Prime Minister”.

Mr Abbott also linked the Slipper scandal to the Craig Thomson affair, saying it was another “huge integrity issue” which Ms Gillard had tied her reputation to.

Mr Thomson faces allegations of using a union credit card to withdraw cash and pay for prostitutes while he was head of the Health ­Services Union, before entering ­Parliament in 2007. Fair Work ­Australia is set to publicly release a report in the coming weeks. Mr Abbott demanded yesterday that it be released immediately.

Mr Slipper’s decision to stand aside means that the government is again dependent on Mr Thomson to guarantee its parliamentary majority. The opposition has signalled it will intensify its attack on the ­government over the long-running investigations into corruption ­allegations against Mr Thomson and try to force him to quit. The weakening of the government’s power in Parliament could have implications for the budget, particularly because it means that Greens MP Adam Bandt’s support is likely to be crucial to pass the legislation to implement the 2012-13 federal budget.

The Greens have publicly criticised the government’s plans to return the budget to surplus, accusing Ms Gillard and Mr Swan of risking seriously damaging growth.

Mr Swan has said that achieving a surplus will require tough spending and revenue measures. These will require legislation to be passed by both houses of Parliament and the Greens would have the chance to vote to defeat them in both places.

The crisis surrounding the Speaker erupted with the disclosure on Saturday of court documents revealing allegations of misuse of his travel entitlements and sexual harassment.

The allegations were made by a former member of Mr Slipper’s staff, James Ashby.

Despite a chorus of calls – led by the opposition – for Mr Slipper to stand down from his job, the Gillard government refused to respond to them. Both Deputy Prime Minister Wayne Swan and the government’s key parliamentary tactician, Transport Minister Anthony Albanese, publicly said it was up to Mr Slipper to decide how to respond to the allegations.

The Speaker is elected by the members of the House of Representatives and can only be forcibly suspended or removed by a vote of the Parliament. The government, however, could signal an intention to move such a vote when Parliament sat.

When he returned from overseas yesterday Mr Slipper initially issued a strong denial of the allegations against him. A few hours later he announced his decision to stand aside. He said he would not reoccupy the Speaker’s chair until the criminal matters alleged against him were dealt with – although not the sexual harassment claims.

“The allegations include both a claim of criminal behaviour and a claim under civil law,” Mr Slipper said in a statement. “Any allegation of criminal behaviour is grave and should be dealt with in a manner that shows appropriate regard to the integrity of our democratic institutions and to precedent

“The allegation is incorrect, and once it is clear they are untrue I shall return to the speakership.”

He said that, in relation to the civil matter, there would be an appropriate process that would resolve the matter “in due course”.

Ms Gillard in a short statement welcomed Mr Slipper’s decision to stand down. “It is appropriate that Mr Slipper has stood aside as Speaker whilst alleged criminal conduct is investigated.”

Ms Gillard left for Gallipoli yesterday and is expected to hold a press conference during a stopover in ­Singapore this morning.

In a comment aimed at the opposition and the media she added: “It is also appropriate for all parties to note the processes under way and treat them with respect.”

The Federal Police confirmed last night that they are investigating the criminal matter which relates to claims by Mr Ashby that Mr Slipper abused his entitlements of office in relation to Cabcharge vouchers.

In the event that the legal process is not concluded before Parliament resumes on May 8, Labor MP and deputy speaker Anna Burke will take over the Speaker’s role.

Mr Slipper is not able to vote in the House of Representatives during his suspension. Ms Burke will only have a casting vote on tied votes.

The effect of that on the numbers in the House will be to reduce the government’s majority to make it reliant on the support of four crossbench MPs to pass legislation – and to defeat any attempt by the opposition to force the government from office by passing a motion of no-confidence in the government. Mr Slipper’s decision to stand aside appears to have removed the prospect of the opposition moving a no-confidence motion on budget day when Parliament sits for the first time since his decision.

But in a sign that the government faces a more precarious position in parliament, Tasmanian independent MP Andrew Wilkie joined the opposition in demanding that Mr Slipper stand aside. He was the only cross-bench MP to support the opposition.

And while three of the six cross-bench MPs have given a commitment to the government to support it against no-confidence votes, Mr Wilkie has left open the possibility of voting to bring down the government following his claim that he has been betrayed by Ms Gillard over poker machine reforms.

The Australian Financial Review

BY Geoff Kitney

Geoff is a senior national affairs writer and columnist in
our Canberra bureau.